Will a bank count extra shifts from the same employer?

The fact it all comes from one employer does not mean a bank will count every dollar the same way. I check what each payslip line is for, how often it appears and which lenders can consider it.

This is the mistake I see most often. Someone uses the total year-to-date figure, but the bank has not separated their normal roster income from optional overtime. My first question is simple: what was each extra payment actually for?

Imagine you are a permanent part-time nurse contracted for 30 hours a week. You regularly pick up another shift, work weekends and occasionally stay back.

If you work a fly-in fly-out roster, the FIFO home loan guide explains how to separate roster income, allowances and overtime.

To you, it is all income from the same hospital. To a lender, that payslip could contain three or four separate income types.

The wording matters. If your contract says permanent part-time and the extra amount is overtime, I do not call it casual income simply because somebody described the additional shifts as casual.

The reverse is also true. A second position with another contract should not be presented as ordinary overtime just because the employer names look similar.

Say your contracted salary is $90k and you earn another $20k from extra shifts.

The $90k base stays the same. Only the treatment of the extra shifts changes.

Up to $20k of the same pay can disappear from the income assessment.

Income illustration only. This is not a borrowing capacity calculation or a lender result.

An extra $20k of assessed income does not translate into a fixed amount of borrowing power. The lender also checks your expenses, other debts and dependants. We need those details to compare borrowing limits for you.

I looked at how 10 lenders assess extra shifts with the same employer. Their rules fall into 2 broad groups. The useful question is whether the extra pay is a normal part of the job or simply happens regularly.

Lender reviews: Commonwealth Bank; NAB; Macquarie; Suncorp; Westpac; St George; Pepper Money; ANZ; ING; People First Bank.

I look for a lender that fits the way you earn your income. I also check the rate, deposit, property and full application before recommending an option.

If an assessment looks lower than you expected, ask for the income figure that was actually used.

• If the lender used only your contracted base, I want to see which extra lines were left out.

• If it reduced everything by the same percentage, I want to see whether shift penalties and overtime were bundled together.

• If it called the income a second job, I want to confirm whether there is really a second employment contract.

• If it called the income casual, I want to compare that description with your legal employment status.

This is also where our year-to-date income calculator can help you compare your recent pay with the prior financial year. It can show whether the higher income has continued or came from one unusually busy fortnight.

If your bank has used only your base salary, send me the income figure it used and two current payslips.

Sometimes two payslips prove what you are being paid now. They do not always prove that the extra amount is the normal level to use for a home loan.

Lenders may check 2 different periods:

1. How long you have earned the overtime, shift payments or second income.

2. How much of the financial year is covered by the year-to-date figure on the payslip.

A lender asking for 3 or 6 months of year to date coverage is not necessarily saying you must have earned overtime for exactly that long. It may be testing whether the current figure is representative. Another lender may compare the current payslips with your final payslip or ATO income statement from the prior year.

If your extra shifts only increased recently, I do not present the latest fortnight as though it had always been your normal income. I show what changed, when it changed and why the new pattern is likely to continue. If the evidence is still thin, waiting can be the cleaner answer.

The lender will usually assess that as income from a separate job. The second job home loan guide covers those rules.

The lender may then look at:

• how long both jobs have run at the same time

• whether the combined hours are sustainable

• whether there is a fixed or reliable pattern

• whether the second role has its own waiting period

Some second-job policies cap the total hours they will use. That does not mean the same cap automatically applies to overtime inside one permanent job.

If the extra work is genuinely casual employment rather than overtime, use the casual employment home loan guide. If your contracted base is permanent part-time, the part-time employment guide explains how that base income is usually treated.

Some lenders may use more of that income, but I do not stop at the job title.

The policy may also ask:

• whether you are employed by a hospital or another organisation

• whether the role appears on the lender's eligible occupation list

• whether you have passed probation

• whether the income is regular or a condition of employment

• whether lenders mortgage insurance is involved

That is why a broad statement such as "nurses get all overtime counted" is unsafe. Some lenders do use 100%. Others use less, and the employer or evidence can change the result.

The home loans for nurses guide covers the wider occupation and deposit questions. Use it to check the occupation and deposit requirements alongside this income assessment.

These 3 documents usually show why the income figure needs checking.

This confirms the legal employment arrangement and can show whether a loading or allowance belongs to the normal roster. If there is another contract for the extra shifts, I need that too.

I separate base pay, overtime, shift loading, penalties and allowances. The year-to-date figures also show which components have actually been paid this financial year.

This helps me compare your recent pay with a longer period. If the extra income has increased, I want to show when it changed and why it may continue.

From there, I can tell whether we need an employment letter, earlier payslips or another document. Each document should answer a specific question about the income.

• Apply using the supported income now. This can work where the payslip lines are clear, the pattern is representative and the current policy fits.

• Seek a policy exception before applying. I would speak with the bank first where the employment contract is clear but payroll describes the income in a way that could be read two ways.

• Wait until you can show a longer income history. This may be better where hours have only just increased without a clear explanation, or the loan depends on every dollar of a recent busy fortnight continuing.

List all the extra shifts you work, even if you left them out of an earlier estimate. Alongside the lender assessment, ask yourself whether the repayments would still fit if you chose fewer extra shifts. Tell me the repayment amount you feel comfortable with and the savings you want to keep.

A short wait can be better than applying with an income figure the documents do not yet support.

If the income is part of a wider mix of casual work, overtime, allowances or contracts, the income and employment home loan guide will help you choose the right starting point.

Hunter Galloway Finance Pty Ltd is Credit Representative 476903, authorised under Australian Credit Licence 389328. This page is general information, not credit advice or a credit assessment. Lender policy and eligibility can change, and every application is assessed individually.

Client examples are based on real situations. Names and identifying details have been changed.